Frequently Asked Bankruptcy Questions
Below are a number of frequently asked questions that we get from many of our clients. The responses are general and may be different for you depending upon your own unique circumstances. Our initial bankruptcy consultations are FREE. Call 503.224.3100 or contact us online now to schedule your free no obligation consultation and find out if our bankruptcy attorneys can help you and your family.
Will I lose my home?
Whether or not you will be able to keep your home depends on the current value of your home and the amount you owe against it. In Oregon, if the value of your home after subtracting the mortgage balance is $40,000 or less ($50,000 for married co-filers) then you should be able to keep your home as long as the payments are current and remain current. If the total is considerable more than $40,000 (or $50,000, as may apply) filing a Chapter 13 bankruptcy may be the best solution for keeping your home.
Will I lose my car?
As with a house, your ability to keep your car depends on its value and the amount owed against it. In Oregon, if the value of your car after subtracting the loan balance is $3,000 or less (or $6,000 for married co-filers) you will be able to keep your car. If this amount is greater than $3,000 (or $6,000, as may apply) there may still be alternatives that will allow you to keep your car in either a Chapter 7 or Chapter 13 bankruptcy.
Will bankruptcy stop the foreclosure of my home?
Yes. When you file bankruptcy an “automatic stay” goes into effect that prevents creditors from taking any action to collect on a debt incurred prior to the filing date. This automatic stay will stop a foreclosure sale, but only temporarily. If you are facing foreclosure, make sure you contact a bankruptcy attorney well before your home is scheduled to be sold at auction.
Can I sell my stuff before I file for bankruptcy?
Yes, you can sell your stuff BUT you have to sell it for a fair price. In other words, you can’t sell your car to a friend for $10 – unless the car is really only worth $10. If you do sell something worth more than $500, be sure to keep records of who purchased it and how you spent the money received. Receipts and bills of sale are very important.
Can I give my stuff away before I file for bankruptcy?
No. If you give away anything worth more than $200 it could be considered a “fraudulent conveyance” and the trustee could recover the property.
Will I have to go to court?
If you are represented by a bankruptcy attorney, in most cases the only legal proceeding you will be required to attend is the Section 341(a) Meeting of Creditors that takes place at the US Trustee’s office or the Chapter 13 Trustee’s office. In a Chapter 7 case if you are reaffirming a debt on a car loan, you may be required to attend a short hearing where a bankruptcy judge will determine whether reaffirming the loan is in your financial best interest. There are cases that end up in court for various reasons but in most cases, with proper planning, court appearances can be kept to a minimum or avoided altogether.
Will everyone know I filed bankruptcy?
Your bankruptcy petition is a public document like most other court records and, as such, anyone that searches for your petition could find it. On the other hand, hundreds of bankruptcy cases are filed each day, so, unless someone is specifically looking for your bankruptcy case, there is not much chance they will know about it. All of your creditors will receive notice of your bankruptcy filing.
Will I be able to re-establish my credit after I file?
Yes, our clients report receiving offers of credit within weeks of filing bankruptcy. Most often the offers are for higher-interest rate credit cards with low credit limits. However, once you have filed bankruptcy you can begin to rebuild your credit by using credit wisely and not carrying a balance on your credit cards. You may be able to obtain a “secured” credit card which can also allow you to rebuild your credit.
Will I have to give up all of my assets?
When you file for bankruptcy, everything you own becomes part of the “bankruptcy estate.” However, you are allowed to keep assets that fall within certain guidelines. For instance, in Oregon, the exemption amount for household goods and furniture is $3,000. Now, $3,000 may not sound like a lot of money for all of your household goods and furniture. However, in bankruptcy we use the current value for your property, not what you paid for a particular item or what it would cost to buy it again new. One Chapter 7 trustee explained this idea as follows, “What would you get if you put all your stuff (household goods and furniture) out in your driveway on a cloudy day?” The answer in most cases is not very much and quite often well below the $3,000 exemption.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy code. These materials have been prepared and are provided for informational purposes only and are not intended as legal advice.